The producer price index (PPI) is a measure of prices charged by producers for domestically produced goods, services, and construction. In the US, it is constructed by the Bureau of Labor Statistics in a fashion similar to the consumer price index (CPI) except it measures prices received from the producer’s perspective. It is another one of the various measures of inflation tracked by the US Fed, along with core personal consumption expenditure (PCE) data.
The latest figures have been published by the Bureau and they indicate producer prices increased by just 0.1% during June after seasonal adjustments. The result was in line with expectations and it was the same-sized increase as in May. On a 12-month basis, the rate of producer price inflation after seasonal adjustments slowed to 1.6% after recording 1.9% in May and 2.3% in April. “Core” PPI inflation picked up pace from May’s 0.2% to 0.3% in June while the annual rate remained at 2.3%.
Westpac’s Head of NZ Strategy Imre Speizer described the figures as “another sign that the US is not at risk of a deflationary slide.” ANZ economist Hayden Dimes agreed but went further and said the report’s figures provided “another sign of inflation in the economy.”